Potential NVIDIA/Intel settlement could mean good news for Apple

Intel and NVIDIA appear to be in talks to settle their licensing dispute over …

The licensing dispute that has prevented NVIDIA from building controller chips for Intel's latest CPUs may finally be coming to a close. Late last week, a Bloomberg report cited inside sources that claim the two companies are in talks to settle the matter out of court. While both Intel and NVIDIA would benefit from a settlement—for instance, by avoiding legal fees for protracted litigation—Apple also stands to gain.

The whole brouhaha started early last year when Intel sued NVIDIA, claiming the chipset licensing agreement between the two companies does not allow NVIDIA to make chipsets for Intel CPUs that include an integrated memory controller. Intel moved to an integrated memory controller with its Nehalem architecture, including the Core i-series processors. This move effectively shut NVIDIA out of the chipset market for most future Intel CPUs.

NVIDIA fired back with its own lawsuit, claiming that it had every right to continue to make chipsets for Nehalem and future Intel CPUs according to its reading of the CLA. If it didn't, as Intel claimed, then Intel would no longer have the rights to license NVIDIA graphics technology for Intel's integrated GPUs, among other things.

The move came after Apple had abandoned Intel controllers for most of its machines with Core 2 Duo processors for the 9400M controller from NVIDIA. The 9400M included an integrated GPU that was far more capable that the IGP in Intel's offerings, provided a major boost in graphics performance across Apple's line (particularly in its notebooks), and gave Apple a platform to make all of its computers compatible with the then-new GPGPU programming standard, OpenCL.

However, the licensing dispute meant that Apple couldn't upgrade the processors in some of its most portable machines, including the 13" MacBook models and its ultraportable MacBook Air, without giving up the benefit of the graphics boost from NVIDIA's integrated graphics. This, in turn, has left Apple to continue using Core 2 Duo processors—based on a decidedly outdated architecture—paired with an updated NVIDIA 320M controller. Despite the fact the final product offers good performance, the use of the positively ancient Core 2 Duo still looks bad for a company that markets premium products and demands a premium price.

Intel and NVIDIA were set to enter the courtroom to begin trying their case on Monday, but that date was cancelled by both parties this week. UBS analyst Uche Orji said in a note to investors that settling out of court would save both companies time and money by avoiding a lengthy trial, but that it would also give Intel clear access to NVIDIA patents on the graphics and parallel processing technology it would need to compete with AMD's upcoming Fusion processors.

"Given the current regulatory backdrop, we expect Intel to avoid the public scrutiny of a trial," Orji noted, referring to recent antitrust scrutiny Intel has faced.

It's pure speculation, of course, since neither company would comment on the issue, but we wouldn't be surprised if Apple didn't put pressure on the two companies to settle their differences as well. An amicable agreement between the two would mean that Apple could incorporate newer Intel processors in its most compact notebooks while still standardizing on OpenCL-compatible GPUs.

Apple took a pass on Arrandale processors in the latest MacBook Air models because Intel's IGP would mean performance hit for the graphics-heavy UI in Mac OS X. The IGP in Intel's upcoming Sandy Bridge mobile processors is expected to have vastly improved performance over its Arrandale predecessor, but is still based on relatively ancient architecture and, from what we have been able to gather, is not OpenCL compatible.

Intel's next architecture update, Ivy Bridge, is expected to have a design that is OpenCL compatible, but Intel won't commit to providing OpenCL drivers. "Intel is evaluating when and where OpenCL support will intercept our products, however no announcement has been made," spokesperson Nick Knupffer told Ars. Apple isn't in a position to wait any longer for Intel to step up its IGP game, and NVIDIA likely has designs waiting in the wing for Apple to use once the legal issues are cleared. A settlement now could ultimately be a win-win-win for everyone involved.